Proposed Tamarac Investment Law Gets Criticized

January 14, 1986|By Tom Lassiter, Staff Writer

TAMARAC — A proposed ordinance intended to guard against another ESM Government Securities debacle has met a chorus of disapproval, most notably from members of the city`s investment advisory committee.

Committee Chairman Ed Solomon on Friday wasted no time in expressing his dissatisfaction with the proposal for tightening city investment procedures.

``The ordinance doesn`t reflect the recommendations of this committee,`` Solomon told the City Council. ``It is my opinion no part of what we asked for is there.``

Solomon said he was particularly upset that the council has failed to repeal the so-called Disraelly Amendment, a 1981 city code change that gave the city manager authority to invest city funds.

``Until that`s done, you`re setting the date for the next catastrophe,`` Solomon said during a public hearing on the proposed ordinance.

Also, authority over city investments should rest with the council, not an administrative board as called for under the proposed ordinance, he said.

Resident Vickie Beech, noting the city has failed to adopt new investment procedures 10 months after the ESM collapse, told the council she feels ``someone is stalling this issue from going forward.``

Mayor Philip Kravitiz said ``no one is trying to stonewall anything.`` At his suggestion, the proposal was tabled for more work.

Under the proposed ordinance, a new administrative investment board composed of the city manager, city attorney, finance director and the mayor would make investment decisions. A majority vote of the council could overturn those decisions, under the proposed ordinance.

The ordinance would restrict city investments to U.S. Government-issued bonds and treasury notes and certificates of deposit for which the full amount is covered by federal deposit insurance.

Tamarac had about $7.4 million invested with ESM when the firm was closed by the Securities and Exchange Commission on March 4, 1985, in the largest government securities failure in U.S. history. The city is due to recover at least $1.5 million, but expects to spend $250,000 in legal fees doing so.